"We think seasonality and last year’s fake trade reporting contributed to the slump in exports and the trade deficit in China," BarCap analysts led by Jian Chang in Hong Kong wrote today.

A moderation in demand also played a part in the weakness in Chinese trade data. Barclays expects export growth to recover to the mid-upper single digits by May-June, and the trade balance to return to surplus by then. The focus will likely remain on China in an otherwise risk-off week, with January-February activity data due out on Thursday.

China's average Jan-Feb exports declined 1.6% year over year versus a 7.4% increase in the fourth quarter 2013 and a 4.2% increase in December and 10.6% in January.

Premier Li Keqiang and Finance Minister Lou Jiwei reiterated their confidence in the Chinese economy over the past few days, with Li saying the country was on target to grow 7.5% this year.

However, they cited improvement in external demand -- which reversed course in February. Li also said that reforms would have an impact in the second half. On Wednesday, Li promised to push ahead a slew of policy changes, including further cutting administrative review and approval items for new businesses, pushing forward hybrid ownership in the State-owned sector and reform of the fiscal and taxation system.

Sun Xuegong, a researcher at the Institute of Economic Research in Beijing, told China Daily on Monday that structural reform and growth are not necessarily mutually exclusive, and reform requires a certain level of economic growth.

"There is already a lot of talk that when growth is too fast it is not a good time for reform. But what has not been discussed much is when growth slows too much, it is not good for reform either, as decelerated growth and a stagnant living standard will curb the need for industrial upgrading," Sun was quoted saying.